Financial Planning

Things to Do At the Start of the New Financial Year

Friday, July 21 2023
Source/Contribution by : NJ Publications

A month has already passed since the start of the new financial year (FY). When it comes to any matter involving finances, accounts, and taxation, the FY is crucial. Since a lot of activity takes place during this phase, it is an important period for many businesses and employees. Regardless of any action though, the financial year presents an opportunity for everyone to revisit their finances and their plans for the new year. There are a few things that ought to be done. Here’s a brief checklist of the things you should do at the start of every FY. 

1. Revisiting your Financial Plans

A long-term financial plan is a very important element of any person’s financial journey in life. The idea is to identify, and plan for our financial goals and align our portfolio with savings to fulfill them. Thus, it becomes crucial that we should regularly review our goals and plans. The start of the financial year presents an opportunity to revisit your goals. Typically the need for any change may arise due to any change in your current life including family composition, financial situation or your own requirements and aspirations. 

2. Portfolio Review

Your portfolio consists of different asset classes and different underlying products /investments. The portfolio review is where we are making decisions on the portfolio composition and reviewing the underlying holdings. If you already have a financial plan in place, your portfolio should be tuned to these predefined objectives. In the absence of the same, there should be some portfolio-level asset allocation strategy followed as per your risk profile. Reviewing your portfolio may lead to rebalancing the asset allocation to start with. At the granular level, you would also want to make sure that you have ‘suitable’ holdings while removing any non-required, long-term non-performing holdings.

3. Managing Incentive & Salary Increment 

This is the time for many to receive the yearly performance incentive /bonus. The joy of earning the annual bonus, which is something we all look forward to, is followed by many plans about how to spend it. Further, this is also the time when you look forward to your salary increments. With both, a sizable amount and an increased cash flow every month, it is also the time to plan for the same. Surely, rewarding yourself with a well-deserving holiday break or a new gadget is well justified. However, going overboard and spending more than required is something you would wish to avoid. So again, it is that time of the year when you put some part of that bonus and increment to good use by investing & saving it towards your goals. Note that regularly increasing your monthly savings or SIP and investing lumpsum amounts significantly contributes to your wealth creation journey.

4. Assessment of Insurance Coverage 

Your responsibilities notably grow after key life events like marriage, parenthood, buying a house, etc. Make sure your insurance has enough coverage to handle all of these newly added commitments. Return back to the calculations you would have used to determine the appropriate level of coverage for yourself and your family members, add the amount required to cover the additional responsibilities and purchase any extra coverage that you require. However, each of those measures must be completed while taking into account your needs and possible risks. Keep in mind that you should reassess your insurance coverage each year to make sure it is sufficient to cover both your standard of living and the growing cost of medical care.

5.Tax Planning 

The beginning of the financial year is a good time to do your tax planning rather than the year-end. That’s because you have enough time to calculate your expected tax liability and make decisions for savings and spending for tax-saving purposes. Moreover, this is the right time to do so since there is no rush or pressure of deciding something quickly and thus you are less likely to make any mistakes. You now have ample time to estimate tax saving needs and evaluate all options available and make those investing & spending decisions for the entire year.

6. Revisiting your Financial Behaviour & Past Decision  

Your financial and investment behaviour is perhaps the most important determinant of your financial success /well-being over the long term. Every investment decision taken, not taken or delayed carries risk, return and opportunity cost elements. Decisions influenced by emotions, biases, unrealistic expectations and so on can have a huge impact on your wealth creation journey. The start of the year is an opportunity to learn from your financial and investment decisions taken over the last year which can be improved now. It is also an opportunity for you to set some benchmarks for yourself and frame a proper process /checklist for any financial decisions that you can make in future.


We celebrate and welcome the start of the new calendar year with a lot of excitement and zest. Most of us also set new resolutions and targets for the new year. The start of the new financial year should be seen as equally important in the financial sense. Why not set some new financial resolutions? This is a time for self-assessment in monetary terms and resetting yourself close to your financial objectives and well-being. One should resolve to be a better and wiser investor and ensure that your financial path in the coming year is clear and well-planned. It is time for you to also pick up the phone and schedule a meeting with your mutual fund distributor/ advisor and set the ball rolling.

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